Which of the following is the correct formula for the asset turnover ratio?
A) Net sales / Average total assets
B) Net sales / Cost of goods sold
C) Net sales / Net assets
D) Net profit / Net sales

Question

Quizplus · Accepted Answer

The asset turnover ratio measures the efficiency of a company in using its assets to generate sales. It is calculated by dividing net sales by average total assets, which shows how well a company is using its assets to generate revenue.

Which of the Following Is the Correct Formula for the Asset